Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

WHEAT EXPORT MARKETING BILL 2008

Australia’s wheat export marketing arrangements are not working effectively.

The previous government’s wheat export marketing arrangements failed to protect the interests of growers.

First, there was no effective separation of the management of the listed company AWB Limited and the subsidiary AWB International.

Second, the export monopoly resulted in a lack of contestability in services.

This meant that returns to growers from the National Pool were not maximised because the costs of operating the pool were not minimised.

And third, the body established by the former government to protect the interests of growers – the Wheat Export Authority, as well as its successor – the Export Wheat Commission, – was not given the powers it needed to do its job.

Worse, the government failed to ensure it used the limited powers it had effectively.

These failures were highlighted over the years during a range of inquiries and reviews, including the Cole Commission.

For example, the 2000 National Competition Policy Review of wheat marketing arrangements, the study by ACIL Tasman in 2006 and a recent analysis by ABARE, all failed to find any compelling evidence that single desk marketing can deliver price premiums in the international market.

These studies provided convincing evidence that the old single desk had an inhibiting effect on both innovation in marketing and the realisation of cost savings in grain transport and handling.

The research found any price premiums were largely attributable to freight advantages or to the provision of services associated with the sale of wheat – not the single desk arrangement.

In addition to those authoritative reports, successive ‘Grower Reports’ produced by the Export Wheat Commission suggest that growers were not getting the best financial deal under the old single desk arrangements.

For example, the 2007 report raised concerns about the financial risk faced by growers under AWB Limited’s hedging practices relating to the 2005-06 and 2006-07 pools and chartering rates charged by AWB Chartering.

The failings of the previous government’s wheat marketing policies are well documented.

Risks to growers were increased by forcing them to rely on a single exporter. For example, by forcing growers to export through AWB International, Australian growers temporarily lost access to the Iraq market, a critically important market which has only recently resumed Australian wheat imports.

The former government’s policy reduced incentives for much needed investment in rail and port infrastructure.

It stifled innovation by restricting growers’ capacity to invest in their own marketing options.

It prevented growers from being able to take full advantage of high-premium niche export markets.

It restricted growers’ marketing choices.

And it prevented industry from working collaboratively to maximise supply chain efficiencies.

An evidence-based assessment clearly demonstrates the failings of the old single desk system.

In the wake of the Cole Commission, the previous government had an unprecedented opportunity, indeed a clear responsibility to act, and to act decisively.

But it failed to do so.

It failed to do so because the Liberal National Coalition was paralysed by division.

Instead, in response to Cole, the previous government put in place a series of half-hearted temporary measures which were nothing more than a patch up job.

The temporary measures, which remain in place today, not only failed to remedy the underlying defects but in fact exacerbated the problems.

Worse, the previous government politicised the complex arrangements by granting temporary veto powers for bulk wheat exports to the then Minister.

We now have the absurd situation where the Minister for Agriculture, Fisheries and Forestry decides who can and who can not export wheat in bulk.

Even the monopoly holder has described the current temporary arrangements as unworkable.

AWB Ltd Managing Director Mr Gordon Davis recently said, and I quote, “No responsible Board of Directors would agree to continue running a National Pool in these circumstances and in the current US sub-prime environment”.

The temporary arrangements are a stark reminder of just how badly the issue of wheat marketing has paralysed the Liberal-National Coalition.

Members on all sides of the House need to appreciate that this legislation is about providing choice to growers.

Under the old rules, growers who wished to export wheat in bulk outside of AWBI were prevented from doing so.

The purpose of this legislation is to give growers the choice of determining which exporter they wish to use.

This should not be considered an unreasonable step.

After all, it is their wheat.

This bill delivers on a key election commitment to establish a system that will provide Australian wheat growers and the grains industry with a structure that will maximise incentives, minimise costs, increase supply chain efficiencies, reduce risk and protect growers.

This bill will make marketing services more cost-efficient, and will open new markets for Australian wheat.

In developing the draft legislation, the Government has undertaken an extensive consultation process:

• we have released an exposure draft of the legislation for public comment
• the Senate Rural and Regional Affairs and Transport Committee has inquired into the bills
• we have established an Industry Expert Group which has consulted with industry and reported on the most effective delivery of industry development services
• and I, and my Department, have consulted with a range of stakeholders, including growers, grower organisations, bulk handlers and potential exporters.

The Government has conducted several detailed private briefings with each of the state farm organisations.

And a significant number of non-government members and Senators also took up the offer of private briefings.

The Government is particularly pleased with the response to this consultation process and the willingness of industry to look to the future and work cooperatively with government to refine the legislation before you today.

The Government has listened to the views expressed by industry members and the Senate Committee, and has accepted arguments put forward on a number of issues.

The draft legislation has been amended accordingly.

The new arrangements will be in place by 1 July 2008, so that growers and other industry participants will know, with certainty, the arrangements that will apply for the 2008 harvest.

The Government will conduct an independent evaluation of these arrangements commencing in 2010.

By then, the scheme will have been operating for long enough to allow a true indication of its effectiveness.

This review will be conducted by the Productivity Commission, and will include an evaluation of the costs and benefits of the arrangements.

The new arrangements centre around the establishment of a new industry regulator, Wheat Exports Australia, which will control bulk wheat exports by managing an export accreditation scheme.

Wheat Exports Australia will be established as an agency under the Financial Management and Accountability Act 1997 and will be subject to the provisions of that Act.

It will be comprised of a Chair, and between three and five other members who will be appointed based on their skills and experience in relevant areas.

I have established a selection committee to provide me with a list of candidates for consideration.

I expect the committee to provide its recommendations shortly.

The primary responsibility for Wheat Exports Australia will be to develop, refine and administer the accreditation scheme.

The scheme will be made as a legislative instrument under the Legislative Instruments Act 2003.

It has been done this way to make sure Wheat Exports Australia has the flexibility to manage the scheme effectively.

While Wheat Exports Australia will be given the power to make and administer the scheme, it will do so under broad policy parameters set out in the bill.

The final scrutiny will be by Parliament, as the Scheme must be tabled and is a disallowable instrument.

As well as granting accreditation, Wheat Exports Australia will have the power to suspend or cancel an accreditation if the exporter ceases to meet its probity requirements or is not complying with its conditions of accreditation.

Wheat Exports Australia will regularly review the financial conditions, and activities, of accredited exporters to make sure they are complying with the conditions of their accreditation.

Accredited exporters will be required to provide annual compliance reports and other relevant information to assist with this process.

Wheat Exports Australia will also be able to audit accredited companies.

There will be severe penalties for exporting wheat in bulk without accreditation, breaching the conditions of accreditation or providing false or misleading information to Wheat Exports Australia.

These will vary, depending on the breach.

These powers and related penalties will mean that, unlike its predecessors, Wheat Exports Australia will have the teeth to effectively perform its monitoring and enforcement responsibilities.

The bill contains an appropriate balance between the need to apply strict probity and performance tests to protect the interests of growers, while not applying an excessive regulatory burden on accredited exporters.

Any company or cooperative may apply for accreditation.

The Government does not believe it is necessary to extend accreditation rights to individuals, as prudent managers would operate as a company to reduce their exposure to risks associated with shipping, what are expected to be, high-value tonnages.

The bill sets out the criteria that Wheat Exports Australia must consider in assessing applications for accreditation.

Wheat Exports Australia will be looking at things such as the financial resources available to the company, its risk management systems and the demonstrated behaviour of the company and its executives including making sure that they are abiding by Australian law and complying with foreign laws and United Nations resolutions.

To ensure continuity of accreditation, exporters will be able to apply to have their accreditation renewed before it expires.

Wheat Exports Australia will apply the same criteria as it would with any application for accreditation.

However, as Wheat Exports Australia will already hold significant information relating to the applicant, the process should be less onerous.

While applicants will need to comply fully with some of those criteria, Wheat Exports Australia will be able to exercise some flexibility in respect of others.

There are some eligibility requirements that Wheat Exports Australia must consider, and it will have to make a judgment on whether the applicant’s record is likely to impact on its ability to fulfil its obligations as an accredited exporter.

Wheat Exports Australia has the discretion to make decisions based on the applicant’s particular circumstances and proposed export arrangements.

In determining whether an applicant is fit and proper for accreditation, Wheat Exports Australia is to have regard to a number of clauses as spelled out in section 13(1)(c) of the bill.

In reference to section 13(1)(c), I stress that the 17 clauses that follow are not of themselves the test, but are issues to which Wheat Exports Australia must have regard when determining whether or not the company, in the present, is a fit and proper company to be accredited to export wheat in bulk.

If a company does not meet one of the criteria to which Wheat Exports Australia is to have regard in determining whether an applicant is fit and proper for accreditation, it does not necessarily mean it will not be accredited.

For example, Wheat Exports Australia may also consider what action the applicant has taken to remedy the situation.

Wheat Exports Australia will need to exercise judgment as to whether the applicant is fit and proper to be accredited even though it may not pass all of the items in section 13(1)(c).

The assessment of the probity and performance of businesses applying for accreditation will go back five years.

All applicants will be treated the same under the assessment process.

However, different conditions of accreditation may be applied depending on the content of their application and their ability to deliver on their proposed activities.

AWB International will not hold any special status, and will need to apply for accreditation based on the same criteria as applied to other exporters.

These criteria are designed to make sure that growers are dealing only with companies or cooperatives of good standing and financial capability.

Growers need to know that exporters have the reputation and financial backing to pay for their crop.

I appreciate that growers will want to know as soon as possible who has been accredited and with whom they can deal.

A timely assessment of applications is essential.

I expect Wheat Exports Australia to assess applications as a priority, and I will make sure the Government provides any assistance needed to help it cope with the initial flurry of applications.

One of the concerns identified during consultation was the risk of a single wheat export monopoly being replaced by three regional monopolies.

There were varying views on how to manage this risk, and the Government considered a number of options to meet the principle of ensuring effective competition without imposing an unnecessary regulatory burden on business.

The Government was also mindful that imposing a significant regulatory burden on the supply chain would only result in increased costs being passed back to growers.

So we have decided to impose specific requirements on accredited exporters that operate bulk grain terminals at ports, as these are the facilities with natural monopoly characteristics and are the infrastructure bottleneck in the export supply chain.

Unless all exporters can obtain access to these critical facilities on fair and reasonable terms then one of the major objectives of the policy could be frustrated.

Compliance with these requirements will be a condition of accreditation.

If Wheat Exports Australia is satisfied that an exporter has breached these conditions it will have the power to suspend or revoke its accreditation.

For the period until 1 October 2009, accredited exporters who operate bulk grain terminals at ports will be required to publish the terms and conditions under which they will provide access to other users.

After 1 October 2009, they must have an approved access undertaking with the Australian Competition and Consumer Commission.

The reason for the different conditions for port terminal operators before and after 1 October 2009 is that, according to advice from the ACCC, it is unlikely that the ACCC could receive, process and approve access undertakings in time for the 2008-2009 marketing season.

The Senate Inquiry also identified concern in relation to the potential for bulk handling companies to restrict access to up-country storage facilities in a similar manner to concerns in relation to port facilities.

It is unclear from the evidence presented to the Senate Inquiry whether the problem would arise, and if so, the extent of legislation that would be required to correct it.

If the highest level of regulation were to be imposed on the more than 500 up-country facilities there is no doubt that this would create increased compliance costs which would almost certainly be passed back to growers.

The government will, therefore, continue to monitor the ability of exporters to access up-country storage facilities.

Let me say here, if any problems are identified then the government will take steps to remedy the situation including, if necessary, the development of a Code of Conduct.

Wheat Exports Australia will require an annual budget of around $4 million which will be funded through the existing Wheat Export Charge at its current rate of 22 cents per tonne of wheat exported.

This will be complemented by accreditation fees which will be determined on a cost-recovery basis.

Funds left over from the Export Wheat Commission will be transferred to the new regulator on its inception.

The Government recognises that these funds will be limited, as revenue from the 2007 crop has been well below expectations because of the drop in wheat exports as a result of the drought.

In addition, the funding streams for Wheat Exports Australia will not generate significant revenue until exports from the 2008 crop are fully underway.

Therefore, some additional start-up funding will be needed, particularly given that operational expenses are expected to be greater in the initial year.

The Government will provide up to $5 million to help Wheat Exports Australia through the transition period.

As part of the reforms, the Government established an Industry Expert Group to advise on the most efficient and effective delivery of industry development functions previously provided by AWB (International) Ltd.

For most of these services the Group recommended a mixture of commercial and industry-driven solutions that do not need to be set in legislation. The Government agrees with this assessment.

The exception is the availability of market information.

The success of the new arrangements will depend on all industry participants having equitable access to key market information.

The Government will facilitate delivery of this information by providing up to $2.52 million over three years for ABS to collect the necessary information and ABARE to prepare a monthly report which will be available to industry.

This approach is consistent with the IEG recommendation.

While I agree with the Group’s assessment that technical market support is a matter for exporters, I appreciate that it may take time for new entrants to develop support arrangements.

The Government will therefore provide funding of up to $600,000, over three years, to help new marketers develop arrangements to deliver effective technical market support.

The Government will be talking to relevant industry representatives on how to best utilise this assistance.

The IEG strongly supports the development of a code of conduct along the lines of that being developed by the National Agricultural Commodities Marketing Association (NACMA) and its members.

The NACMA code is aimed at improving clarity in prices posted at silos and thus allowing growers to make better-informed marketing decisions.

Among other things, compliance with the NACMA code would mean:

• first, prominent listing and use of standardised language and means of expressions for all fees, charges and statutory deductions applicable to all types of transactions in grain
• second, posting on silo boards and on the web, the transparent net return figures for all types of transactions
• and third, expression of base marketing costs charged against all types of transactions.

The Government supports the IEG recommendation and will provide some funding to NACMA to help with the finalisation and promotion of the code.

There is also a need to help growers understand the proposed changes so that they may be able to take full advantage of the benefits the new system has to offer.

The Government will provide up to $1.15 million for information sessions for growers and major customers right across the country starting in July.

This will include informing wheat growers about the new arrangements and associated marketing options and financial dealings, and appropriate checks and balances that will be in place to protect growers’ interests.

The Government will work closely with the state farming organisations in developing and implementing this initiative.

The Government is also committed to finding solutions to problems associated with grain rail infrastructure and is providing up to $6 million for taskforces in Western Australia and New South Wales to investigate ways of stimulating investment in this critical transport industry for rural Australia.

The bill is accompanied by the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008.

This bill provides for amendments to other legislation to make it consistent with the provisions of the main Bill.

This is an exciting time for Australian agriculture.

Australia’s wheat export marketing arrangements must be changed if the Australian wheat industry is to realise its true potential in the global market place.

With grain prices at historically high levels, growers are now very well positioned to directly benefit from the changes the Government is introducing.

These benefits in turn, will flow back to regional and rural communities that depend on Australia’s grain growers.

Under these changes, for the first time in more than 60 years, Australian wheat growers will be able to choose who they sell their grain to based on the very best deal they can get.

Today’s farmers continue to benefit from the abolition of trade tariffs and the trade liberalisation reforms introduced by the Hawke-Keating Labor governments.

Today’s wheat growers also enjoy the benefits offered by the deregulation of the domestic wheat market in 1989.

Tomorrow’s farmers stand to benefit from the reforms introduced to the Parliament today.

WHEAT EXPORT MARKETING (REPEAL AND CONSEQUENTIAL AMENDMENTS) BILL 2008

To ensure the new wheat export marketing arrangements operate effectively, various amendments are needed to make other legislation consistent with the provisions of the Wheat Export Marketing Bill 2008.

The bill will help ensure an orderly transition to the new arrangements and make certain that growers are not disadvantaged because of arrangements entered into under the previous legislation.

It also repeals the existing Wheat Marketing Act 1989.

The key provisions include:

• amending the Customs (Prohibited Exports) Regulations 1958 to reflect the fact that the export of bulk wheat is prohibited without accreditation from Wheat Exports Australia
• providing for the transfer of funds held by the Export Wheat Commission to Wheat Exports Australia
• allowing the Export Wheat Commission to develop the accreditation scheme before 1 July 2008 so that it will be operational from the start of the new arrangements
• allowing Wheat Exports Australia to finalise outstanding tasks of the Export Wheat Commission. For example, Wheat Exports Australia will finalise the report on the performance of AWB (International) Ltd in relation to the benefits delivered to growers from its management of the 2007-08 National Pool
• allowing AWB (International) Ltd to continue marketing of wheat from the 2007-08 National Pool, and for those exporters who have been granted bulk export permits to complete shipments under those consents, without needing accreditation up to 30 September 2008
• amending the Criminal Code Act to make it an offence to provide false information to Wheat Exports Australia in an application for accreditation under the Wheat Export Marketing Bill 2008
• amending the Primary Industries and Energy Research and Development Act 1989 and the Primary Industries Levies and Charges Collection Act 1991 to ensure that provisions contained in them that refer to the Wheat Marketing Act 1989 will still apply despite the repeal of the Wheat Marketing Act 1989.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I inform the Senate that Liberal senators will not be opposing the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008. As is well known, this legislation creates an exporter accreditation scheme for the export of bulk wheat and represents the formal shift in our export wheat-marketing arrangements. Although progressive change has meant that the single desk has not been functioning for at least a couple of years in the manner in which it was established, this legislation removes the single desk and creates a scheme to accredit multiple exporters. It is a significant formal change, and we well understand that not everybody in the wheat industry supports this change. But the Liberal Party, on balance, believes that this change is inevitable.

An incident having occurred in the gallery—

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Order! Members of the public gallery might not be acquainted with the rules of the Senate, but interjections are disorderly. I prefer you not to make them; otherwise, you will be removed.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

So the Liberal Party will not oppose this bill in the Senate as we do believe these changes will create new opportunities for Australia’s wheat industry. There are a range of views on this issue. We are well aware of that, and I pay my respects to those in the gallery who wish to see the past arrangements continue. But the parliament does have to make a decision about the future of export wheat marketing, which is of course a function of legislation passed by this parliament. We do need to make a decision on this now, because something has to occur by 30 June 2008, the point at which the temporary arrangements put in place by the former coalition government expire. Those current arrangements were put in place by our government following the AWB scandal, the arrangements that were entered into with respect to Iraq and the effective collapse of those arrangements.

It was clear to the Liberal Party then, as it is now, that the single desk arrangements, with a monopoly exporter in the form of AWB, simply could not continue. If we were not to pass legislation of this kind now, we believe that would be going backwards. We do have to address the realities that we face and do our utmost to create new opportunities for Australia’s wheat industry.

An incident having occurred in the gallery—

The Acting Deputy President:

Order! I would really rather that members of the public gallery attended the debate and listened to it. But, if you continue to interject in that manner, you will be removed by the attendants. So please accept that as a warning. We would prefer you to remain.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I acknowledge and understand the passions that this issue arouses. But it is the Liberal Party view that competition will ultimately deliver better prices to farmers, and farmers of course will have more choice in how they market their wheat. We do see this legislation as positive for the wheat industry, and I hope that those who are reluctant to accept these changes will look at the opportunities this new system will create. These bills have been examined by the Senate Standing Committee on Rural and Regional Affairs and Transport. I thank Liberal senators on that committee for their involvement and work throughout the inquiry, and I commend them on their additional comments in the report. They were right to highlight the flaws in the exposure drafts of this legislation, particularly the fact that they did not actually formally recognise wheat growers in the legislation. The government have adopted many of the points raised in the Senate committee report that were mentioned by Liberal senators and we welcome those changes.

I have to express my disappointment at the second reading speech of the Minister for Agriculture, Fisheries and Forestry on this legislation, as he sought to politicise this issue and attack the former coalition government. We are grappling with a difficult issue and we are trying to find the best way forward for this industry, but this is not the time to be politicising this issue. But the minister spent 20 per cent of his speech attacking the former coalition government instead of talking about the legislation and how he and his government see it benefiting growers. Labor’s only position in opposition was of course to attack the coalition. They opposed the AWB operated single desk and were also opposed to the interim arrangements that the former government put in place to deal with the outcome of the Iraq wheat scandal. They opposed a ministerial veto, yet never presented an alternative. I think most disturbing, particularly for wheat growers, is the fact that Labor went to the election quite clearly promising to retain the single desk but have now broken that promise. They have not explained that to growers, who still want a single desk, or explained why they have broken that promise.

It is important to place on record that the coalition, as such, is very proud of its record on rural and regional issues. We well understand—better than any other political entity in this country—the contribution of rural and regional Australians to this country, and we are proud of what we did in government for many, many years in this country. We know that during tough times like the droughts, which my own state of South Australia feels as much as anywhere else, rural communities are the hardest hit and need support. That is why, as finance minister in the former government, I was happy to support our measures to provide more than $3½ billion in drought assistance and other measures to help rural and regional families and communities during what has been the worst drought in living memory. All we see from this government—the new Labor government—is that rural and regional Australians are a target for its razor gang funding cuts. We are very disappointed with the sorts of cuts that Labor has made to rural and regional programs. I ask those present to contrast that with the work that Liberal members and senators do to support rural and regional Australia in this place.

My own state of South Australia contributes around 20 per cent of Australia’s export wheat production. As a South Australian senator, I am well aware of the farmers who passionately support deregulating the wheat industry as well as those who oppose it. There is a range of views on this matter and South Australian Liberal senators have listened consistently to those views. The Liberal Party have always, in hand with our National colleagues, been concerned with the plight not only of wheat growers but of other rural producers in Australia, and we acted in government in their best interests. Although wheat production in recent years of course has been affected by drought, we are still dealing with a significant agricultural industry, with production in the order of some several billion dollars. We understand and respect the importance of that industry to Australia and the importance of sustainable and prosperous rural communities, and our record in government reflects that.

The legislation surrounding wheat marketing has a long history in this country, involving a progressive change to less regulatory arrangements, going back to the Hawke and Keating governments, which of course deregulated the domestic market nearly 20 years ago. Following the Cole inquiry, the coalition government removed the AWBI monopoly on bulk exports. It was our government that deregulated the export of non-bulk wheat. In December 2006, the coalition government announced that an extensive consultation process would be undertaken to gather industry views on the future of the Australian wheat export industry. In January 2007, the coalition government announced the appointment of the Wheat Export Marketing Consultative Committee to consult with industry, particularly growers, and report back on their export marketing needs. That committee delivered its report to the government in March 2007. In May of that year, Prime Minister Howard announced the way forward for our government:

... growers will be given by the government until 1 March 2008 as the time within which to establish a new entity to manage the single desk completely separate from AWB Ltd. This may be a completely new entity or a demerged AWB International and it will take over management of the single desk.

But he went on to add:

If growers are not able to establish the new entity by 1 March next year—

that is, this year—

the government will propose other marketing arrangements for wheat exports.

Prime Minister Howard said:

Let me make this clear to the House. The options available would include further deregulation of the wheat export market.

So, certainly from the Liberal Party’s point of view, our position has always been clear and we have always held out that one of the options is further deregulation of bulk wheat exports. I would ask those present and those listening to contrast that clear and honest position with the position of the Labor Party. The Labor Party’s 2008 election policy stated:

Labor proposes a new model for exporting wheat which retains a single desk for the control of wheat exports ...

Not surprisingly, in our view, Labor has said one thing and delivered another. But Mr Burke, the minister, still claims that he is delivering on an election commitment. We of course expect the Labor Party to seek to play politics on this and point to the different views which the Liberal and National parties have on this. But Labor’s hypocrisy knows no depths when it seeks to abandon its own pre-election statements on the matter.

I mentioned that the National Party has a different position on this, and we respect its position. We understand that the longstanding position in the National Party is of support for a single desk. On this occasion, that is one issue with which Liberal senators and Liberals in the House of Representatives cannot find agreement with the National Party. The National Party opposed Labor’s initial deregulation of the domestic wheat market in 1989. The Liberal Party at that time supported that deregulation and we voted separately on that matter. But our coalition has gone on from strength to strength since that time. Our coalition is strong enough for us to understand and respect differences on matters of this kind. The National Party has, as I said, indicated it is not in a position to support this legislation.

We have—as Liberal senators and members of the House of Representatives from all over Australia—listened to the great variety of views that have been expressed to us on this matter. As representatives in this great parliament, we have had reference to our fundamental philosophies and policies in order to determine our position forward. We have come to the view that, in relation to the legislation which the government has brought to this chamber, we will not oppose it. We believe that further relaxing of the regulations surrounding the export of bulk wheat will provide new opportunities for innovation and competition in this industry and will improve choice, clarity and certainty for growers. We believe that this bill will ensure, ultimately, a better future for Australian wheat growers. We do not believe that the old monopoly on bulk wheat exports held by AWB was in the long-term interests of this country. We believe as Liberals that monopolies typically are very bad, and we believe that it was inherent in having a monopoly exporter that corrupt practices would occur and develop. That is one of the reasons why everybody has to face the reality of the situation the country is now in.

There are those who think that you can continue to have this monopoly export arrangement, where people have no alternative but to sell to one exporter. We do not believe that can continue, and that was itself reinforced by AWB’s evidence to the Senate committee, in which they said:

… it is not commercially feasible for AWB to go back to the old arrangements. Let us remember the default set of conditions is a national pool—not a single desk—with bulk permits and deregulated bags and containers. It would not be commercially feasible to manage under those arrangements.

What you are reverting to … is the 2007 Wheat Marketing Amendment Bill, where the veto will transfer from the minister to the regulator, but there have not been additional legislative measures introduced that would spell out how the regulator would apply that veto, and that is the missing part of the picture at the moment.

So AWB made it quite clear that it is simply not possible to go back to the old arrangements, and they were the ones, of course, who held the single desk.

The Liberal Party is looking at some amendments to this bill, which were flagged by our leader, Dr Brendan Nelson, in the House in the earlier debate. We do believe those amendments will improve the position for growers under this legislation. We have put those amendments to the government and asked them to consider them in the hope that they may adopt them as their own or indicate their support for them. We await a response from the government on those amendments, and that will determine our position in relation to whether or not we move the amendments in the committee stage.

I pledge that Liberal senators and our members in the House of Representatives will closely monitor this new scheme to ensure it is meeting the needs of the Australian wheat industry. We will be closely watching Labor to ensure that it does not in any way seek to politicise the new body, Wheat Exports Australia, including through its appointments to that body. We will of course closely monitor the ramifications across the whole industry. We acknowledge that it is a very big change and we acknowledge the fact that many do not want to see it occur, but we do believe that ultimately it will be best for the industry.

I want to close by saying I have the greatest respect for our National Party colleagues in this chamber and understand why they are not in a position to support the legislation, but as Liberals we have to face the reality of the position that the industry is in and the fundamental unworkability of the current arrangements and recognise that it is time for this industry to move forward.

An incident having occurred in the gallery—

The Acting Deputy President:

I will ask the attendants to remove anyone who persistently interjects in the manner in which some members of the gallery have been interjecting.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

The Wheat Export Marketing Bill 2008 and related bill represent a major shift in export wheat marketing in Australia. This legislation sees the final dismantling of the single desk marketing arrangements that have been a feature of bulk wheat exporting in this country for many years. However, this reform is not unexpected. The domestic wheat market has been deregulated for more than 20 years, and the export of wheat in bags and containers was deregulated last year. The export of all other grains has been progressively deregulated. Furthermore, the single desk as it existed at the time of the AWB Iraq scandal has been compromised. The previous government allowed other exporters to enter the market, moving the veto from AWB to the minister. Since then, the single desk has really not been operating as a genuine single desk. The current wheat-exporting legislation needs to be amended, as we all know, one way or another by the end of this month. The present situation is untenable.

This is a very complex issue and one the Greens have not taken lightly. We have recognised the passion on all sides of this important debate, and I wish to thank all those wheat farmers who have taken the time and trouble to write to and meet with me to discuss this matter. I acknowledge their very real and deep concerns about the proposed changes in this legislation.

The Greens have in the past always been supportive of the principles that underlie a single desk for bulk export wheat marketing. We do not automatically believe that the market will provide and are suspicious of deregulation for its own sake. We are also aware of the compromised international wheat market, with Australian farmers competing with farmers who receive substantial subsidies from their governments. We understand the appeal and very strongly believe in the strength of collective bargaining. We think this is particularly important when competing in such a compromised market.

We are conscious of the concerns about large multinational companies coming to dominate wheat marketing in Australia to the detriment of wheat farmers. Similar concerns about the nature of the market and about company behaviour led the Greens to oppose the corporatisation of AWB, believing that the conflict of interest inherent in a corporate holder of a single desk was not in the public interest or the interests of farmers. We were unfortunately shown to be right in the subsequent scandal involving AWB and Iraq and the evidence that AWB did not always operate to maximise returns to farmers. The way that the AWB was structured meant that it could not always put the interests of farmers at the forefront.

We also understand that there is a difference between the principle of a single desk and what happened under the corporate AWB. However, we are not convinced that it is a realistic option at this time to recreate the single desk underwritten by government because government are not convinced that that is the approach to take and are unwilling to put in the funding that would be required to establish a single desk. We believe that the best approach in an ideal world would be a single desk and we have articulated that argument on many occasions. However, as I said, we are aware that the government would not favour a single desk and would not put resources into it, and we do not believe there are resources currently in the farming community to establish a single desk that would operate effectively. In looking at this legislation, the Greens therefore saw their role as one of seeing what would be in the best interests of farmers if we could not have the ideal world and achieve a single desk.

The Greens are very conscious that some wheat farmers, particularly those in my home state of Western Australia, did not support the continuation of the single desk. Many farmers in my home state are in fact supportive of wheat export arrangements that provide them more control and choice as to how they sell their wheat. The views of the WA wheat growers are important in this debate, we believe, as nearly all the wheat grown in Western Australia is exported rather than sold into the domestic market. This in no way diminishes the evidence and arguments of the wheat farmers who are opposed to this bill. The Senate Standing Committee on Rural and Regional Affairs and Transport heard passionate defences of the single desk, and I received correspondence from numerous farmers arguing their position very strongly. They not only argued their position but also articulated the effect this would have on their communities.

Debate interrupted.